Workers over the age of 50 could have lost out on £5.3bn in collective retirement savings due to cuts in pension saving during the Covid-19 pandemic, according to research by Legal & General Retail Retirement (LGRR).

According to the study, 10 per cent of non-retired over-50s, equal to 1.4 million people, are continuing to save less each month towards their pension compared to before the pandemic.

Currently, the average working person over 50 has reduced their monthly savings by £155 a month, although at the peak of the pandemic the average was £219 less, according to LGRR.

This equates to the average non-retired worker over 50 having contributed £3,283 less over the course of the pandemic than they otherwise would have.

Of those that are continuing to save less each month, 39 per cent were doing so due to pay decreases, 22 per cent due to redundancies and job losses, and 13 per cent due to the impact of being furloughed.

One in five (20 per cent) over-50s saving less said they had to reduce their retirement contributions to provide more monetary support to their loved ones.

LGRR revealed that the South East had lost the largest total amount (£1.1bn), followed by London (£817m), the North West (£695m) and the West Midlands (£592m).

Northern Ireland had lost the least (£10m), followed by the North East (£172m) and Scotland (£232m).

“It’s completely understandable that those who have faced financial hardship as a result of the pandemic may have looked for opportunities to cut back on their outgoings,” commented L&G Retirement Solutions managing director, Emma Byron.

“However, as our research shows, saving less, particularly for those in their 50s, could have a significant impact on retirement prospects and planning. Our own analysis suggests that those who have saved less would, based on the median average, need to bring their contributions back to pre-pandemic levels, then pay an additional £41 per month to make good on their shortfall. 

“If the same saver does not bring their contributions back to pre-pandemic levels they might need to delay their retirement by more than four years to reach the levels they previously would have saved before cutting back on their monthly contributions."

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